EW - Is Abbott Laboratories Stock a Buy?
The coronavirus outbreak has put pressure on medical device companies as hospitals postpone elective procedures to focus on the influx of patients. The effect on Abbott Laboratories (NYSE: ABT), however, may be limited because of the types of medical devices the company sells and the diversification of its businesses. Does this mean Abbott is a buy right now? Let's have a closer look.
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Abbott focuses on four business areas: medical devices, established pharmaceuticals, diagnostics, and nutrition. Though medical devices made up 38% of last year's sales, the other businesses represented between 14% and 24%, for a well-balanced total picture. I like the fact that each business generates a significant portion of revenue. That means if one specialty faces a slowdown, another area may compensate. Even better news is that each of these businesses is growing. In the fourth quarter, medical device sales rose 9.7% year over year, while the other businesses rose between 5% and 7.8%.